Mexico’s Comision Federal de Electricidad (CFE) is looking to pay Mbonos+130bp-140bp for the 10-year portion of a domestic bond sale scheduled to price Wednesday, according to people following the transaction. The government electricity monopoly is targeting up to MXP10bn ($766m) through the 10-year fixed-rate portion and a 5-year tranche paying a spread to the TIIE. The issuance falls under a MXP100bn program, and is to be managed by Banorte-Ixe, BBVA Bancomer, Santander and HSBC. CFE’s most recent domestic bond was in June, when the issuer priced a MXP12bn ($911m) floating rate note via Banorte-Ixe, HSBC and Santander. It is rated AAA on a national scale.
Category: Regions
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DF Preps Domestic Debt
The government of Mexico’s Distrito Federal will look to issue up to MXP3bn ($227m) in the domestic bond market November 21, according to a selling memo. The 10-year fixed-rate bonds are backed by future revenues passed down from Mexico’s federal government. The capital’s government is raising money to fund infrastructure projects and to repay debt. Santander is managing the transaction, rated AAA on a national scale. In November of last year, DF sold MXP2.5bn in 15-year bonds at 6.85%, or Mbonos+85bp.
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Fibra Looking to Go Large with Local Bond
Mexico’s Fibra Uno real estate trust is targeting MXP13bn-MXP18bn ($983m-$1.3bn) in what would be the first-ever domestic bond placed by a Fibra fund, say bankers familiar with the deal. It had initially targeted MXP10bn. The real estate fund is considering up to four tranches and may choose among a 5.5-year floating rate bond, 10-year and 20-year fixed-rate bonds and 15-year UDI-denominated notes. Proceeds will be used to refinance bank debt. BBVA Bancomer, Banamex, Credit Suisse and Santander are managing. Fibra Uno’s CFO Javier Elizalde told LatinFinance in June it was plotting a domestic bond issuance this year, with the issuer previously relying on banking lines for leverage. The fund was Mexico’s first Fibra to IPO, in 2011.
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IDB Loans to Bolivia
The Inter-American Development Bank (IDB) has agreed to provide $57m in loans to Bolivia to improve rural irrigation systems, it says. The package includes a $45.7m 30-year loan with a 6-year grace period and undisclosed fixed interest rate, coming from the bank’s ordinary capital. A second $11.4m 40-year loan comes from the IDB’s fund for special operations, and has a 0.25% interest rate.
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AXA Taps Colombian Growth
French insurance group AXA was seen paying a reasonable price to acquire control of Colpatria’s Colpatria Seguros insurance business, in a EUR259m ($346m) transaction that is the latest M&A deal in a busy and often expensive Colombian FIG sector. The move represents about 13x earnings, analysts say, which puts it in line with deals AXA and other global powers have done in the emerging markets. “It’s a reasonable and rather attractive transaction given the growth prospects in this market,” Daniel Bischof, analyst at Helvea tells LatinFinance. He says the 13x figure compares to a 10x figure in Zurich Financial’s $1.67bn purchase in 2011 of Santander’s LatAm insurance operations, and a 15x-16x level seen in the $879m purchase by Allianz of Turkey’s Yapi Kredi Sigorta earlier this year. “Paying 13x for a number four position in a fast-growing market where the target is making money is attractive,” Peter Eliot, analyst at Berenburg Bank tells LatinFinance. Colpatria Seguros is Colombia’s fourth-largest insurance company, with a market share of 7%, AXA says. The move is in line with a previously communicated emphasis on EM growth markets. The transaction, reached through a controlled auction process, is subject to the usual regulatory approvals and is expected to close in 2014. UBS advised Colpatria, according to a person with knowledge of the transaction, with Simpson Thacher & Bartlett and Gomez-Pinzon Zuleta as legal advisors. JPMorgan advised AXA, with Debevoise & Plimpton as legal advisor.
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Cabei Back for More Francs
The Central American Bank for Economic Integration (Cabei) has raised CHF275m ($299m) in dual-tranche bonds, according to a person familiar with the deal. A CHF130m 2016 bond priced at 100.28 with a 0.625% coupon to yield 0.665%, or mid-swaps+45bp. A CHF145m 2019 bond priced at 100.65 with a 1.500% coupon to yield 1.465%, or mid-swaps+65bp. Proceeds will be used for general funding purposes. Credit Suisse managed the transaction, rated A/A2/A. Cabei now turns to the Mexican domestic bond market, and is looking at a $150m-equivalent bond with a tenor of 3 or 4-years. Cabei is also targeting a $50m 15-year bond through a private placement in the dollar market before the end of the year. Looking farther ahead, Cabei is considering issuance in a range of other international markets, including Australian dollars. In January, Cabei raised CHF150m ($164m) in new 2020 bonds, in its first deal in Switzerland since 2010.
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Alsea Looks for Acquisition Funds
Mexico’s Alsea has approached regulators for an equity sale, it says. The proceeds would be used to repay short-term debt used in the $627m purchase of Wal-Mart de Mexico’s restaurant unit agreed in September. It does not give additional details. Bank of America Merrill Lynch advised Alsea on the purchase. Alsea held an IPO in 1999, and has come back to the market twice, most recently in 2012 to raise $88m.
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Ecopetrol Considers Equity Options
Though Ecopetrol’s $2.5bn September bond sale leaves it with a strong cash position, the state-controlled oil company will continue to look for financing, President Javier Gutierrez says at the Ecopetrol Investor Day in New York Friday. “We have enough resources for 2013 and part of the 2014. We still have the possibility to go out to the national or international markets for bonds, loans and ECAs and, finally, if we needed additional resources we may consider the possibility of issuing shares,” he says. Gutierrez adds Ecopetrol has some space to go to the market without affecting its investment grade ratings and says there is a possibility to take advantage of the additional shares it has approvals to sell, though an offering is not under immediate consideration in the short term. Ecopetrol has congressional approval to issue 20% of its capital via primary offerings, of which it has already issued 10.1% in its IPO in 2007 and another 1.4% in a 2011 follow-on. In those sales, only Colombians were allowed to participate directly, with international access available through the secondary market. Now, with the option to sell an ADR, it can target an international investor base and make a big difference in its investor base diversity. So far, the company estimates international investors own just 1.5% of its shares. In Ecopetrol’s September bond transaction, it received $12bn in orders for 2018, 2023 and 2043 bonds. Ecopetrol is carrying out its strategic growth plan through 2020 with capex of approximately $80bn with the goal of increasing production and transport capacity and modernizing existing refineries by 2020.
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Italian Seeks Argie Sale
Telecom Italia has received an offer worth $1bn for a stake in its Argentina unit, it says. The shedding of the 22.7% stake is part of a larger plan to raise funds that included a EUR1.3bn ($1.74bn) convertible bond sale. The company does not make any comments about strategy for its largest LatAm asset, a majority stake in Brazilian mobile phone operator TIM Participacoes – which has also been the subject of speculation.
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AIH Discloses Demand
Peru’s Andino Investment Holding (AIH) saw $142m in total demand for its $115m 2020 bond issued last week, it says. The issuer widened pricing last week to a final 11% from earlier 10%-area indications, and issued less than the anticipated $130m size Thursday. The B+/BB minus issuer priced at par with a 11.0% coupon, according to people following the sale, which had initially been expected to price Wednesday. The trade and transport-focused holdco is raising funds to help repay $86.5m in bank debt and finance $43.5m in capex. Bank of America Merrill Lynch, Credicorp and Goldman Sachs managed the transaction. Last year, AIH raised $43m in the ECM and sold $110m in bonds at its Terminales Portuarios Euroandinos unit, in a sale managed by Goldman Sachs.